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What are the benefits of LLP in India?
What is LLP in India?
What is a limited liability partnership (LLP)?
What is limited liability partnership (LLP) Act of 2008?
Concept of "limited liability partnership" • LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. • The LLP can continue its existence irrespective of changes in partners.
- Partners and Designated Partners
Change of LLP Information; Close LLP; e-Filing. LLP Forms...
- Applicability of The LLP Act
Introduction of LLP Bill,2006 in the Parliament and...
- Registration
Change of LLP Information; Close LLP; e-Filing. LLP Forms...
- Partners and Designated Partners
- Brief Overview. What is a Limited Liability Partnership (LLP)? An LLP is a form of business organization that has become popular among entrepreneurs as it gives the benefits of a private limited company (such as limited liability and separate legal entity) along with flexibility offered by a traditional partnership firm.
- Taxation of LLP. An LLP is taxed in the same way as a traditional partnership firm subject to certain exceptions like the benefit of presumptive taxation under section 44AD or section 44ADA of Income-tax Act, 1961 (“Income-tax Act”) is not applicable for LLP but applies to a partnership firm.
- Advantages of LLP. i) Separate Legal Entity: It means that in the eyes of law, LLP is separate from its partners just like a company is separate from its shareholders.
- Disadvantages of LLP. i) Public Disclosure: Public disclosure is the main disadvantage of an LLP. The documents filed through the MCA portal are public documents.
- LLP Is A Body Corporate
- Perpetual Succession
- Separate Legal Entity
- Mutual Agency
- LLP Agreement
- Artificial Legal Person
- Common Seal
- Limited Liability
- Minimum and Maximum Number of Partners in An LLP
- Business Management and Business Structure
According to Section 3 of the Limited Liability Partnership Act 2008 (LLP Act), an LLP is a body corporate, formed and incorporated under the Act. It is a legal entity separate from its partners.
Unlike a general partnership firm, a limited liability partnership can continue its existence even after the retirement, insanity, insolvency or even death of one or more partners. Further, it can enter into contracts and hold propertyin its name.
Just like a corporation or a company, it is a separate legal body. Further, it is completely liable for its assets. Also, the liability of the partners has certain limitations in their contribution to the LLP. Hence, the creditors of the LLP are not the creditors of individual partners.
Another difference between an LLP and a partnership firm is that independent or unauthorized actions of one partner do not make the other partners liable. All partners are agentsof the LLP and the actions of one partner do not bind the others.
An agreement between all partners governs the rights and duties of all the partners.Also, the partners can devise the agreement as per their choice. If such an agreement is not made, then the Act governs the mutual rights and duties of all partners.
For all legal purposes, LLP is an artificial legal person. A legal process creates it and has all the rights of an individual. It is invisible, intangible, and immortal but not fictitious since it exists.
If the partnersdecide, the LLP can have a common seal [Section 14(c)]. It is not mandatory though. However, if it decides to have a seal, then it is necessary that the seal remains under the custody of a responsible official. Further, the common seal can be affixed only in the presence of at least two designated partners of the LLP.
According to Section 26 of the Act, every partner is an agent of the LLP for the purpose of the business of the entity. However, he is not an agent of other partners. Further, the liability of each partner has limitations to his agreed contribution to the LLP. It provides personal liability protection to its partners.
Every Limited Liability Partnerships must have at least two partners and at least two individuals as designated partners. At any time, at least one designated partner should be resident in India. There is no maximum limit on the number of maximum partners in the entity.
The partners of the LLP can manage their business. However, only the designated partners are responsible for legal compliances.
Understand the definition of LLP, its advantages, the process of incorporation, and the distinguishing features of LLPs. Gain insights into the benefits of limited liability, flexible management, ease of incorporation, and tax advantages offered by LLPs.
Mar 21, 2022 · There are quite a few options to select the best business model, yet the choice is usually between a Limited Liability Partnership (LLP) formed under the Limited Liability Partnership...
The Limited Liability Partnership Act, 2008 was enacted by the Parliament of India to introduce and legally sanction the concept of LLP in India.
There is lot of research on ethics related issues done by International Ethics Standards Board for Accountants (IESBA). Its final recommendations are placed in its Code of Ethics, which is regularly updated. It is, therefore, important to refer and follow the provisions of Code of Ethics, based on IESBA Code of Ethics.
